Bull s
JK Holdings
Quarterly Report

October,2021
CONTENTS
P1P2P3International

P464No.

JK Holdings Overview of 1Q Business Results forYear Ending March 2022
UST System (rainwater storage tanks), a lifesaverfor ﬂood damages
Business Prospect for October ‒ December
Market Outlook of Plywood
BUTSURIN CO., LTD. was certiﬁed as ʻA company that acts together for the protectionof forests in Japanʼ by ʻMovement Promotion Council for Active Use of Domestic Lumber and Protection of Forests in Japanʼ
J-GREEN ‒ Japan Kenzaiʼs Eco-Brand~ More friendly to human and environment for the future ~JK Holdings Overview of 1Q Business Resultsfor Year Ending March 2022
Housing starts for April to June 2021 increased by around
10% compared to the same period last year when business
was halted due to the COVID-19 pandemic, but decreased byaround 5.0 to 10.0% compared to the corresponding period
in 2019, both as a whole and in the sector of owner-occupied
houses, which is our main market.
Under these business environments, our group has been working on sales activities, carefully taking measures to prevent
COVID-19 infection. At the same time, we have been preparing for the next generation while implementing the measureslisted in our medium-term management plan "Breakthrough21".In response to the " Wood Crisis ," we took advantage ofour comprehensive strengths as a group, including the involvement in distribution of wood-based building materials
from upstream to downstream, as well as its manufacturing
and processing divisions and overseas divisions, and worked
to procure a suﬃcient amount of wood aside from procuring
and producing alternative materials in order to fulﬁll our responsibility to supply wood and wood-based building materials.
Consequently, the business results for the ﬁrst quarter of theSummary
We would like to introduce you to theUST System, underground rainwater
storage tanks, handled by the Environment & Landscape Business Divisionof Butsurin Co., Ltd. Flood damages inurban areas due to torrential rain havebeen reported more and more recently. The rainwater storage tank system
is a facility that can temporarily store
rainwater underground and discharge it
later in order to prevent ﬂood damages
caused by rainwater runoﬀ.
Izumi Co., Ltd., headquartered in
Higashi-ku, Hiroshima City, which
operates shopping malls called YoumeTown, will open a large shopping mallwith the underground rainwater storage
system in Saijo-cho, Higashi-Hiroshima City. The development area covers
about 119,600 square meters, whichis equivalent to the size of 2.5 Tokyo

Keiichiro Aoki

President
JK Holdings Co.,Ltd.

ﬁscal year ending March 2022 were as follows.
Sales increased by 5.1% over the year-ago results to 86,287
million yen, almost as much as the growth in housing starts,
taking into account the new accounting standards introduced
this ﬁscal year.
As to proﬁts, all found substantial growth since gross margin
ratio improved on a whole group basis through meticulous
control of purchasing and sales in terms of both quantity andquality, in addition to a steady increase in the operating rate at
the KEYTEC Yamanashi Plant, which began operations in thespring of 2019. Operating proﬁt grew by 123.7% to 2,023 million yen, ordinary proﬁt by 133.6% to 2,068 million yen, andquarterly net income attributable to shareholders of the parentcompany by 166.8% to 1,273 million yen.

UST System (rainwater storage tanks),
a lifesaver for ﬂood damages
Dome Stadiums.
Butsurin has participated in the project
for the design and construction of theUST system, of which storage capacity
is 12,142 cubic meters, the largest-classthe company has ever built. They are
currently in the middle of constructionof the super large rainwater storage
tanks. The tanks will be buried in soil tobe invisible after it is completed. They
will play a highly important role in
ﬂood damage countermeasures, literally
as a behind-the-scenes support.
[Project Outline]
Orderer: Izumi Co., Ltd.
Project Name: Izumi Higashi-Hiroshima Development Project (rainwaterstorage tank construction)

Size: 6 rainwater storage tanks with astorage capacity of 12,142 cubic meters
Construction Period: April 20, 2021 toSeptember 30, 2022
Contractors: Kajimaroad Co., Ltd. andThink Construction, Inc. in JV

CompletedBulls International No.64

2Survey

Prospect of Business Condition for July
− September

and other building companies) predict
the index will be minus 21.1 points
while distributors answered minus
26.2 points. The scale of their negativeevaluation has substantially shrunk. In
the previous survey, their prospect for
demand declined due to concern about
so-called “Wood Shock”, but the points
have turned to indicate recovery.

Business Prospect for
October - December<Demand Forecast by
Builders and Distributors>

By area, though the results are still
showing minus evaluation, the condition has recovered in all areas. For example, the evaluation for the Hokuriku
area was plus 7, where positive forecast
exceeds negative forecast. As the inﬂuence of COVID-19 pandemic led torevision of housing environments, thedisaster does not necessarily create asense of recession in the housing market. Meanwhile, there are concerns overthe supply of raw materials such as
semiconductor and copper in addition
to lumber. Every year, we can expect anactive demand in autumn, but this year,
we must be careful about the impact of
those factors.

According to Ministry of Land, Infrastructure, Transport and Tourism,housing starts from January to June
2021 were 412,010 units (103.3%year-on-year). By owner/occupant,the owner-occupied houses and builtfor-sale houses have improved with
107.7% and 101.4% respectively ona year-on-year basis. Though housing
companiesʼ status of order reception isbrisk, the number of housing starts has
not reached the level of 2019 before"COVID-19 pandemic".
Under the circumstances, the ministrycompiled the results of a survey aboutbusiness demand trend for October– December 2021. According to thereport, small builders (contractors<Sales Forecast by Leading
Manufacturers>

Demand Forecast by Builders
100-10

2.0

-18.3

-7.3

-20-21.1-34.5-30-40-50-46.0-60-70-80 Oct-Dec
2019

-67.0
Apr-Jun
2020

-40.6

Also, with major manufacturersʼ sales forecast, negative views
decreased, and positive
ones increased in all
sectors compared to theprevious survey. Amongothers, plywood makersʼ
prediction to rise was
60.0%, which is theApr-Jun
2021<Various Topics and Current Status of Remodeling>

To the questionnaires about the inﬂuence of soaring timber price andits stock shortage, 40.0% of the respondents cited ʻconstruction delayʼ,
followed by ʻthe impact is minorʼ. The
rate of builders who work on high-performance housing was no more than
37.0%, and those work on long-life
quality housing occupied the majority.
As the movement toward the realizationof a low-carbon society accelerates,builders are expected to work harder onenergy-saving housing.
Builders who answered that they are
utilizing digital technology are mainly
using it in the business ﬁeld and for ofﬁce work. They use the services mainly
to support the management work, but
the range of servicers are widening. For
example, site construction management
services involving business partners areexpanding, and the wave of digitalization is getting closer.

The forecast survey for October – December 2021 is based on the totaled
data gathered from 3,000 client companies in Japan through the internet,
which took place from late-July to mid-August 2021.

-65.4
Oct-Dec
2020

next highest level to 68.5% marked in
the pre-tax increase survey in January– March 2014. Currently, stocks aredecreasing, and it is taking a long timeto deliver. Stable supply is required.
The forecast made by manufacturers ofwooden building materials and housing
equipment also shows positive prospects. Average value of makersʼ forecast
has turned to positive.

Oct-Dec
2021

Point0=business result in April-June,1992

Demand Forecast by Distributors

Dealing Volume of Lumber

2065

100-10-20

Laminated lumber
Solid lumber
Precut lumber
LVL

60

4.9-6.4

-15.4

55

-26.2

-30

50

-38.0

-40
-50

-48.5

-60
-70

-80 Oct-Dec
2019

45-43.1

40-68.6 -66.7
Apr-Jun2020

Oct-Dec
2020

Apr-Jun2021

35 Oct-Dec

Oct-Dec
2021

2019

Point0=business result in April-June,1992

Apr-Jun2020

Oct-Dec
2020

Apr-Jun2021

Oct-Dec
2021

Point100=all responses expect increase

Sales Forecast by Major Supplying Manufacturers（Oct-Dec 2021）
increaselevel-offdecreaseover15％14 ～ 10％

below10％

below10％10 ～ 14％

over15％

30.0

10.0

20.0

30.0

10.0

0.0

0.0

0.0

21.1

15.8

36.7

21.1

0.0

5.3

0.0

0.0

28.0

44.0

24.0

4.0

0.0

House Equipments（9firms）

0.0

0.0

27.6

58.6

13.8

0.0

0.0

average

7.5

7.8

22.9

42.3

17.2

1.0

1.3

Plywood（13firms）
Wooden Building Materials（10firms）
Ceramic/Heat Insulation（15firms）

International No.64

Trend
Market Outlook
of Plywood<Trend of Japanese Plywood>
Japanʼs production of softwood plywood in July 2021 was 270,321 cubic
meters (121.2% of the previous yearʼsresult), and shipment was 272,363
cubic meters (116.1%). The amount ofboth the production and shipment wasalmost equal. Inventories were 90,617
cubic meters (56.5%).
The wood shortage gave less impact tothe market than it was concerned, andorders to manufacturers are very strong
due to the recovering market. It has
started to take more days for delivery,
and it is impossible for makers to deliver products immediately.
In order to ﬁll backorders, manufacturers are trying to reduce the quantity oforders to receive and increase their production as much as possible. In reality,
however, it seems to take much moretime to improve the supply situation because of the shortage of material logs aswell as labor shortage. It will probably
not be easy to ﬁx the issue by the end of
the year when the inﬂuence of snowfall
appears in the northern Japan districts.
Plywood prices have kept rising every
month, but with the prices of all imported materials continuing to rise, there is

no resistance to the price hikes. Dealers
continue to secure products. They call it
the “plywood crisis” lately, rather thanthe “Wood Crisis”.

<Trend of Imported Plywood>
Japanʼs import of plywood in July 2021
was 228,783 cubic meters (145.2%of the previous yearʼs result), which
increased to 107.8% of the results of
212,145 cubic meters in the previousmonth. Looking at the result by country of origin, the amount of production
showed Malaysia with 74,745 cubic
meters (182.8%), Indonesia with 67,758
cubic meters (107.1%), and China with
63,816 cubic meters (162.3%).

Arrivals are ﬁnally improving compared to the results in 2019 and 2020,
but the domestic port inventories havebeen at a low level and there remains asign of shortage. Manufacturers restricted orders to receive for some items, andthe situation is expected to continue
within this year.
It is diﬃcult to predict the future conditions as the producing regions are entering into the rainy season. Importers arebecoming cautious about buying products because the purchasing prices havebeen remaining strong at the highest
price range.

Wholesalers' Prices of Plywood in Tokyo

25002000

Bullsyen/sheet

Structural Use 12mm JAS F4☆
Concrete Form 12mm JAS
Softwood Plywood for Structural Use 12mm JAS F4☆
Softwood Plywood for Structural Use Neda-non 24mmwith tongue JAS F4☆

1500
1000
500

Mar2021 Apr2021

May2021 Jun2021

Jul2021

Aug2021

Topics

BUTSURIN CO., LTD. was certified as‘A company that acts together for theprotection of forests in Japan’by‘Movement Promotion Council for Active Useof Domestic Lumber and Protection of Forests in Japan’
The council, which was established toregenerate the cycle use of wood or ʻcut,use, plant and growʼ by appealing to thepublic for active use of domestic lumber
and creating demand for the products,
is expanding its activities by certifying
the companies that ﬁt its purpose. The
total number of certiﬁed companies has
become 71 including Butsurin.
A certiﬁcate award ceremony was heldin Shinkiba Tower in Shinkiba, Koto-ku
on May 20.
President Tannaka said in his speech, “Inorder for domestic lumber to become amaterial for the circular economy bothin name and reality, it is important todevelop demand and increase its value,and I believe this is where the role ofButsurin lies. Taking this opportunity,
we would like to work more aggressively on the active use of domestic lumber
while considering how to convey theimportance of the resource to younger
generations and how to continue oureﬀorts.”
Butsurin is expected to play active roles

as a facilitator which connects forests
with construction sites as a distributor
that is acquitted with building sites in
expanding demand for domestic lumber
and promoting the development of infrastructure, and moreover, as a coordinator for regional revitalization.

34

Bulls International No.64

CompanyJ-GREEN ‒ Japan Kenzaiʼs Eco-Brand~ More friendly to human and environment for the future ~ʻJ-GREENʼ is an eco-brand for plywood
and wood products. We select legitimate products and environmentallyfriendly commodities and are making
eﬀorts to make them popular at homeand abroad.
Falcata resources, which is one of the
major planted trees in Indonesia, issupported by the inhabitantsʼ aﬀorestation. However, most of Falcata products
are exported overseas, so, its log consumption and price ﬂuctuation dependon overseas consumers. In view of thissituation, Japan Kenzai launched aplantation business in Indonesia for thissustainable tree.
By contributing funds, Japan Kenzai
grows seedlings of Falcata and provide
them to the local community free ofcharge. The community plants the seedlings and manages the forests. Afterseven or eight years of growing period, our company will buy the logged
Falcata and manufacture the material
into J-GREEN products at our aﬃliatedsawmills. And then, we import and sell

the products in Japan. We have createda cycle where the proﬁts are used fortree planting again. By getting a purchase guarantee of the grown Falcata,
the community will be able to earn astable income.
This project contributes to the creationof local employment by this cycle. As
this eﬀort was highly evaluated, we obtained FSC® forest certiﬁcation which
is very rare for a planted forest area.

Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3835
URL https://www.jkhd.co.jp
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